By Lylah Davies, Clean Energy Finance and Investment Mobilisation Programme, OECD Environment Directorate
Women currently account for approximately 32% of total employment in the renewable energy sector, compared to 22% in the more traditional oil and gas sector. On the one hand, this tells us that women are generally under-represented in the energy sector overall, but on the other, it shows that renewable energy, as a younger and more dynamic sector is an opportunity for change. With energy-related greenhouse gas emissions at a historic high in 2019 and 800 million people still lacking access to energy, the world needs to keep moving towards cleaner energy options. Further increasing the gender diversity of the renewable energy sector will help societies to tap into more innovative potential to drive this transition. Yet, barriers remain for women entering the renewable energy sector that need to be addressed in order to increase participation.
Barriers to women in the renewable energy sector
Supporting women’s access to this sector is important for gender parity and for wider economic, societal and environmental benefits. According to the IMF, at a macroeconomic level, the productivity gains from narrowing gender gaps across the economy could increase GDP by 35%. Studies also show that increasing the diversity of leadership teams improves the quality of innovation and financial performance of businesses.
If narrowing the gender gap has been show to garner multiple benefits in the renewable energy sector, then why do we not see more progress?
Gender norms, social and cultural practices are amongst key barriers identified in IRENA’s report, Renewable Energy: A Gender Perspective. There is an enduring perception that women are less suited to technical fields. In emerging economies, notably in rural contexts, there is little or no technical training for women or it is often discouraged altogether. In general, fewer women than men will choose to go into STEM fields, though providing girls with better information on career opportunities and female role models can help to increase numbers. This may also translate into gender biased hiring practices or misperceptions that women are ill suited to roles, for instance seeing physical strength as a barrier to installation work. The IRENA report also lists lack of mentoring opportunities and access to informal networks, unequal pay, and inflexible working hours, as some of the barriers to career progression.
Supporting more women to take on leadership roles in the renewable energy sector can help to create a virtuous cycle for more women to enter the sector and for organisations to be better adapted to women. In Thailand, for example, a female solar power pioneer Wandee Khunchornyakong founded a solar power firm in 1993, which now owns 36 solar farm projects across the country and employs a workforce that is 60% female.
A central role for women in increasing access to clean energy
The rise of small-scale renewable energy generation and energy efficiency projects can give women in rural areas the opportunity to act as energy-entrepreneurs as well as energy-users. Women can play a significant role in the successful deployment of clean energy to displace fossil fuel supply and, as they are often the most affected, they also have the biggest stake in expanding access to energy. In certain countries, where cultural norms limit interaction between genders, women can easily interact with female end-users, by entering households to install technology when male family members are not present. For example, Barefoot college works in emerging economies to break down prescriptive gender roles and empower women to help their communities. They do this by teaching women from rural areas to design, install and maintain solar systems that provide electricity or hot water to their villages.
Women solar energy entrepreneurs, interviewed by the IEA, faced the common challenge of convincing financial institutions to provide finance, as well as creating networks and partnerships for their businesses. In emerging economies, women are often less financially independent than men, on average being less likely to own or actively use a bank account. On the demand side, female entrepreneurs generally have less knowledge of available business opportunities, credit facilities and bank services. Women are often at a disadvantage by having less capital to invest or collateral against which to borrow. On the supply side, an Asia Foundation study found that bank managers often lack confidence in business plans put forward by women, which they deem riskier by default. In addition to this, a Goldman Sachs study found that female entrepreneurs in India were almost twice as likely to have their loans rejected in comparison to male entrepreneurs.
Mainstreaming gender policy in finance and investment
Access to information, training, networks and female role models can help level the playing field for entrepreneurial women in the clean energy sector. However, for businesses to thrive, the financial sector plays a crucial role. Women-led businesses are generally underfunded, notably in emerging markets. Investment ecosystems often passively exclude female entrepreneurs, as informal and formal networks between investors and entrepreneurs are heavily male dominated. In order to overcome barriers to women accessing finance, it is important to integrate gender-based factors into investment decisions.
Mainstreaming gender policies can encourage women’s participation across asset classes. A growing number of initiatives focus on micro small and medium enterprise level to support energy access in emerging economies. Tools such as impact investing and gender bonds can provide businesses with access to credit designed for women. Gender policies are equally relevant for large-scale energy projects and can have wide reaching benefits. For example, in 2019, BBVA provided 44 million USD for a 48MW wind farm in Turkey, as a gender loan. The terms of the loan improve as the project sponsor develops more gender inclusive staffing and recruitment policies, and increases partnerships with female-dominated businesses in the supply chain.
The OECD supports policy making for gender diversity in clean energy
For initiatives to bear fruit, policy making should consider gender in the broader social, legal, and institutional context. This could include, for instance, understanding the implications for women accessing credit when women are significantly under-represented in leadership roles in financial sectors.
The OECD programme for Clean Energy Finance and Investment Mobilisation (CEFIM) supports governments in creating an enabling environment for finance and investment in renewable energy and energy efficiency in emerging economies. This includes identifying policy gaps, and providing advice based on best practice and investor dialogues. The programme currently operates in Asia and Latin America, where gender equality and clean energy are priorities. While keeping in mind the role that women can play in the clean energy transition, current work is exploring whether finance and investment policies sufficiently take into account the barriers female entrepreneurs’ face in accessing finance.
The recent OECD Global Forum on Environment focused on Mainstreaming gender and empowering women for environmental sustainability. Speakers at the conference highlighted multiple environmental benefits to supporting women, but also the disproportionate costs they often bear. Most importantly, they emphasised that using indicators and collecting gender-disaggregated data is a first step to recognising and measuring issues, and identifying new opportunities. This ultimately enables better policy making that will enhance the welfare of both men and women